Linn Group Morning Corn Comment

CHICAGO - Dec 13/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was higher on Wednesday as we saw wheat up almost 40 cents
synthetically, beans up 16 cents and crude oil up almost $4.50.  Corn is
still a follower right now, but there is some underlying bullish factors
including Goldman Sachs announcing a price target of $5.30 from $4.40 for
Dec08 corn and the energy bill which should add some ethanol mandates.  If
the energy bill does pass, the US will have to come up with more corn from
somewhere or reduce feed and exports.  The Goldman Sachs announcement is
just that, an announcement, but they still carry a lot of weight in
commodity arena and from where today’s corn prices are, this offers
speculators opportunity.  Investment funds have been the big story the last
1 ½ years in the grain markets, so when they talk, the market listens.  We
could be looking at the beginning of a rebalance of some of these funds as
the price target on wheat wasn’t as big as the price targets in corn and
beans.  Crude oil was up almost $4.50 and that helped support the corn
market.  Volume remains very heavy and funds were net buyers of 11,000
contracts.  Weather in Argentina remains a non-factor as they are almost 85%
planted and have received some rains to get the rest of the crop planted.

eCBOT market was unchanged/slightly higher overnight as traders try and
decipher if the corn market is going to keep extending into new highs or if
there is going to be a set back.  Export sales this morning were good, not
great, but that was expected.  Analysts estimated the export sales at 1.1 to
1.3 mil and actual sales were 1.155 mil.  This number will probably be
washed under the rug and traders look to other markets for direction and to
see what type of fund activity we have today.  The announcement by Goldman
Sachs yesterday announcing price objectives for corn, wheat, and beans has
had the desired affect of pushing up the corn and bean prices.  We look for
the corn market to open higher today but it may have trouble extending gains
as it gets into over bought conditions technically.  Technicians point to
some price objectives for corn and the rally may take a break after reaching
almost 6 month highs again yesterday.  The investment funds are the wild
card as they have been in buying corn the last couple of days and some
traders will tell you the rally was as much a lack of selling than huge
buying.  Corn is still a follower even with the positive fundamental data

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH8                433^6    0^4                   434^6    431^4

ZCZ7                 416^6    0^0                   417^2    415^0

ZCK8                444^4    0^2                   445^0    442^2

ZCN8                450^4    0^6                   451^0    448^4

Early CBOT Grain Complex:  Corn Steady

Top News

**USDA Corn 07/08 Export Sales Net: 1.155 mln mt; 08/09 Net: 310,200 mt;
expected 1.1-1.3 mln mt

-- A report released by Strategie Grains looks for imports of Corn into the
EU at 11.3 mln mt for the 2007/08 MY; report also notes to help balance
global Wheat supplies the EU will need to raise second half MY 07/08 exports

-- 2007 Corn harvest in Hungary pegged at only 3.98 mln mt down from year
ago 8.28 mln mt, acc. to the Hungarian ag ministry

-- 2008/09 EU cereal grain output is estimated at 290.6 mln mt a rise of 14%
from the prior crop year, acc. to report by Strategie Grains

-- Press reports Wednesday that 2 additional poultry farms in Poland have
been infected by the avian flu strain H5N1, bring the total to 5. This comes
as a string of poultry farms have been infected.  2 Turkey farms in central
Poland had been discovered infected on Dec 1st, a 3rd much smaller farm near
the 2 turkey farms was infected also.  About a week later a 4th farm had
been found infected.

-- Dalian May Corn futures were 10 higher in overnight trade settling at
1,745 Yuan/mt

-- eCBOT Corn Vol: 170,954; Pit Vol.: 43,626; Open Interest change: +14,391

-- Weather: 6-10 Day Forecast: Above Normal Temps. Above Normal Precip. Rain
and snow moves out of the eastern Corn Belt later today. Friday looks dry.
Saturday will see some light snow favoring southern areas.

-- Outside markets. Energy up slightly at $94.40; Gold & Silver:-3.2 at $810
& -.095 at $14.5 ; US $ is trading lower vs. the Yen, slightly higher vs.
the Euro.

Cash Markets

-- CIF Corn off 1 - 4. Dec. +28 to +33, LH Dec. +33 to +36, Jan. +40 to +42,
Feb. +48 to +50, Mar. +49 to +51, A/M +40 to +42 J/J +40 to +42



If you have any questions or want to discuss specific trade recommendations,
contact me directly.

Jim Riley
Linn Group
877-787-6278
jriley@linngroup.com
www.linngroup.com/

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